Britain in grip of worst economic crisis for 60 years, admits Alistair Darling

Britain is in the grip of its worst economic crisis for 60 years, Alistair Darling has admitted.

The Chancellor of the Exchequer warns that the slump is going to be "more profound and long-lasting than people thought".

In an astonishingly frank interview, Mr Darling admits that voters are "p***** off" with Labour and says the party must recover the "zeal" which won it three successive general elections.

Since taking up the post, Mr Darling is said to have faced a crisis "every week", including the collapse of Northern Rock and the loss of millions of people's personal details from HM revenue & Customs.

Such is the public concern over the economic crisis, Mr Darling said that he has been challenged while filling up his own car by motorists demanding to know how he intends to improve the situation.

A wine waiter also warned him from ordering a second bottle of wine during a restaurant meal, he reveals.

The Chancellor, who had been tipped for a move in a possible Cabinet reshuffle later in the Autumn, also candidly admits that he is "not a great politician."

The article in The Guardian is a clear sign that Mr Darling is determined not to be blamed for Gordon Brown's troubles.

During the interview he claims people are trying to take his job and says they are "actively trying to do it," a remark that will be widely interpreted as a sideswipe at the Prime Minister.

There have been clear tensions between the Treasury and Number 10 in recent months and many of his comments will be read with dismay in Downing Street.

Mr Darling makes clear that he was not the source of a story earlier this month that he might temporarily suspend stamp duty in order to stimulate the housing market. The leak - which the Treasury suspects came from Downing Street - backfired and led to accusations that the uncertainty caused had actually caused home sales to stall.

The Chancellor says he has spent all his political life trying to avoid "this kind of interview". But his advisers have long claimed that he does not conform to his "boring" caricature and have chosen the eve of the new political season to improve his public image. However, many of his comments will be seized upon by his opponents.

Mr Darling says the economic times we are facing "are arguably the worst they have been in 60 years." "And I think it's going to be more profound and long-lasting than people thought," he adds. Further evidence that Britain is on the brink of recession emerged this week.

A report into house prices showed they had dropped 10 per cent in the last month - the biggest drop in prices since 1990.

And on Thursday David Blanchflower, a member of the Bank of England monetary policy committee, warned unemployment would hit two million by Christmas. Mr Darling admits Labour - currently 19 points behind the Tories in the latest Telegraph opinion poll - is in trouble.

He says: "We've got our work cut out," he said. "This coming 12 months will be the most difficult 12 months the Labour party has had in a generation, quite frankly.

"In the space of 10 months we've gone from a position where people generally felt we were doing ok to where we're certainly not doing ok.

"We've got to rediscover that zeal which won us three elections, and that is a huge problem for us at the moment - people are p***** off with us."

He adds: "I was at a filling station recently, and a chap said, 'I know it's to do with oil prices - but what are you going to do about it?' People think, well surely you can do something - you are responsible - so of course it reflects on me."

The Chancellor also said he heeded a warning from a waiter when out for dinner with friends recently not to have a second bottle of wine, seemingly because it would look like he was pushing the boat out while others were being forced to live more frugally.

A year on from the start of the credit crunch Mr Darling admits that the first time he really became aware of a problem was while on a Mediterranean holiday when he read a newspaper report about the European Central Bank ploughing billions of pounds into the money market.

In addition to the economic problems he has faced, Mr Darling also recalls the moment he discovered that millions of child benefit records contained on computer disks had been lost by the government.

"I just thought this is a disaster. This is terrible...I phoned Gordon up....We knew it was bad."